Ch.-1 - INTRODUCTION

  “Accounts Officer” means the Head of an Office of Accounts or the Head of a Pay and Accounts Office set up under the scheme of departmentalization of accounts;

“Appropriation” means the assignment, to meet specified expenditure, of funds included in a primary unit of appropriation;

“Controlling Officer” means an officer entrusted by a Department of the Central Government with the responsibility of controlling the incurring of expenditure and/or the collection of revenue.  The term shall include a Head of Department and also an Administrator; 

“Drawing and Disbursing Officer” means a Head of Office and also any other Gazetted Officer so designated by a Department of the Central Government, a Head of Department or an Administrator, to draw bills and make payments on behalf of the Central Government. The term shall also include a Head of Department or an Administrator where he himself discharges such function;

“Head of the Department’’ means an authority or person (not below the rank of a Deputy Secretary to the Government of India), declared by the concerned Department in the Government of India as a Head of Department in relation to an identifiable establishment or establishments to exercise the delegated financial powers under these Rules; 

“Head of Office” means

(a) a Gazetted Officer declared as such in the Delegation of Financial Powers Rules and

(b) any other authority declared as such under any general or special orders of the competent authority;

“Public Works” means civil/ electrical works including public buildings, public services, transport infrastructure etc., both original and repair works and any other project, including infrastructure which is for the use of general public;

CAPEX model: In the CAPEX Model, Capital expenditures is used by the buyer to straightway purchase goods followed by procurement of consumables, arranging comprehensive maintenance contract after warranty period and finally disposing the product after useful life.

OPEX model: In the OPEX model, the Seller provides the goods, maintains it and also provides the consumables as required and finally takes back the goods after useful / contracted life. The expenditure is made by the Buyer in a staggered manner as per the terms and conditions of the contract.

Interdepartmental Consultations:

    • If a case involves more than one department, no orders shall be issued until all concerned departments concur.
    • In the absence of concurrence, the matter must be resolved by or under the authority of the Cabinet.
    • A case is deemed to involve more than one department if a decision in one department could affect the business of another.

Departmental Regulations of Financial Character:

    • Regulations with financial implications or those involving instructions/orders of a financial nature must be made or approved by the Ministry of Finance.

Removal of Doubts:

    • Any doubts regarding the interpretation of these rules must be referred to the Ministry of Finance for a decision.

Ch.-2 - GENERAL SYSTEM OF FINANCIAL MANAGEMENT

  General:

  • All government receipts, whether as dues, deposits, or remittances, must be credited to the Government Account without delay, as per rules under Articles 150 and 283(1) of the Constitution.
  • Moneys received by officers in their official capacity, excluding government revenues, must be deposited into the Public Account in accordance with Article 284. 
  • The Supreme Court and Union Territory courts must follow the same procedure.
  • Crediting and withdrawal of such moneys are governed by Government Accounting Rules, 1990, and other prescribed rules.
  •  Departments must ensure correct and prompt assessment, collection, and crediting of government receipts to the Consolidated Fund or Public Account. Controlling Officers must verify monthly statements from Accounts Officers to ensure collections are properly credited.
  •  Departments must have regulations for assessment, collection, remission, or abandonment of revenue.
  •   Proper accounting for receipt books (Form GAR-6) is mandatory. 
  • Amounts due should not remain outstanding without valid reasons, and irrecoverable amounts require competent authority approval.  Revenue must not be credited under suspense heads before realization.
  • Authorities must keep the Finance Ministry informed of revenue collection progress and budget variations.

Rents:

    • When rentable buildings are managed by civil departments (excluding the Central Public Works Department), the Administrator or Head of the Department is responsible for ensuring rent recovery.
    • Recovery procedures follow the rules applicable to Central Public Works Department buildings.

Fines:

    • Authorities imposing fines must ensure realization, verification, and deposit into a treasury or bank.
    • Authorities empowered to refund fines must ensure that:
        • Refunds are thoroughly checked to avoid double refunds.
        • Refunds are not issued for fines not deposited in the treasury or bank.

 Miscellaneous Demands:

    • Accounts Officers must oversee the realization of miscellaneous government demands (e.g., contributions from State Governments, Local Funds, contractors, and establishments).

 Revenue Remission and Abandonment:

        • Sanction Requirement:
          • Claims to revenue can only be remitted or abandoned with the approval of a competent authority.
        • Annual Reporting:
          • Administrators and Heads of Departments (except the Department of Posts) must submit an annual report by June 1 to the Audit and Accounts Officers.
          • This report should detail revenue remissions and claim abandonments sanctioned during the previous year.
          • Remissions below ₹1,000 need not be included.
        • Classification and Explanation:
          • Remissions and abandonments should be categorized based on the grounds for their approval.
          • A total figure and a brief explanation of circumstances should be provided for each category.
      •  

  Standards of Financial Propriety

    • Officers handling public funds must adhere to high standards of financial discipline, enforcing financial order, strict economy, and compliance with relevant rules.
    • Key principles:
      • Expenditure should reflect the same prudence as personal spending.
      • Spending should not exceed what the occasion justifies.
      • Authorities must not sanction expenditures benefiting themselves directly or indirectly.
      • Public funds should only benefit individuals or groups when:
        • It is legally enforceable, or
        • It aligns with recognized policies or customs.

Expenditure from Public Funds

    • No authority may incur or commit to any expenditure from public funds (Consolidated Fund, Contingency Fund, or Public Accounts) without the sanction of a competent authority.

  Delegation of Financial Powers

    • Financial powers have been delegated to subordinate authorities per the Delegation of Financial Powers Rules.
    • Powers not delegated remain with the Finance Ministry.

Consultation with Financial Advisers

    • Ministries or Departments must consult their Financial Adviser before circulating draft memoranda for:
      • Expenditure Finance Committee, Public Investment Bureau, Committee on Establishment Expenditure, Cabinet Committee for Economic Affairs, or the Cabinet.
    • Confirmation of this consultation must be included at the circulation stage.

Provision of Funds for Sanctions

  1. Sanctions to expenditure must indicate:
    • Details of the grant or appropriation funding the expenditure.
    • Whether the expenditure can be met through valid appropriation or re-appropriation.
  2. If sanctions are issued before funds are communicated, they must state that the expenditure is subject to budget allocation.

  Responsibilities of Controlling Officers

Controlling Officers are responsible for ensuring:

  1. Expenditure does not exceed the budget allocation.
  2. Funds are used for their intended purposes.
  3. Expenditure serves public interest.
  4. Adequate mechanisms are in place to detect and prevent errors, irregularities, waste, and loss of public money.

  Effective Dates of Sanctions

  1. Sanctions/orders take effect from the date of issue unless a specific date is mentioned.
  2. Temporary posts must include the creation date and duration in the sanction orders.

Powers Regarding Special Matters

  • Subordinate authorities cannot issue orders involving grants, assignments, leases, or relinquishment of revenue without the Finance Ministry’s prior consent unless delegated by or approved by the President.

Powers in Regard to Certain Special Matters

  • Subordinate authorities cannot issue orders related to:
    1. Grant of land, assignment of revenue, concessions, grants, leases, or licenses for minerals, forests, water, power, easements, or privileges unless authorized.
    2. Relinquishment of revenue unless prior consent from the Finance Ministry is obtained.
  • This restriction applies unless the action is authorized through a general delegation or approval from the President.

Procedure for Communication of Sanctions

  1. Communication to Audit and Accounts Officers:

    • All financial sanctions issued by a Department must be communicated to both the Audit Officer and the Accounts Officer.
    • Sanctions for expenditure/payment should be addressed to the Accounts Officer.
    • For non-recurring expenditure, the sanctioning authority can sign or countersign the bill/voucher directly rather than issuing a separate sanction.

  2. Sanctions with Concurrence:

    • If the sanction involves the concurrence of the Internal Finance Wing, Finance Ministry, Ministry of Home Affairs, Comptroller and Auditor General (CAG), or Department of Personnel, it must specify:
      • The reference number and date of the communication conveying that concurrence.

  3. Details in Orders:

    • Sanctions for expenditure must state the amount in both words and figures.
    • Orders conveying additions to pay (such as Special Allowance, Personal Pay) must include a brief summary explaining the reasons for the additions.

  4. Union Territory Government Orders:

    • Where Audit and Accounts are not separated, the order should be communicated directly to the Audit authority.
    • If they are separated, copies should be endorsed to the Audit authorities.
    • If the Central Government was involved in the decision-making process, the sanction should include the relevant reference to the Central Government’s decision.

Vector Illustration Important Information Sign Stock Vector | Adobe Stock Exemptions:

    • Certain sanctions do not need to be communicated to the Audit Officer, including those relating to:
      • Sanctions related to advances to Central Government employees.
      • Sanctions regarding appointments, promotions, or transfers of Gazetted and Non-Gazetted Officers.
      • Sanctions concerning the creation, continuation, or abolition of posts.
      • Sanctions for handing over or taking over charge of positions.
      • Sanctions related to payment or withdrawal of General Provident Fund (GPF) advances for Government servants.
      • Sanctions of contingent expenditure incurred under the powers of the Head of Offices.
      • Other routine sanctions issued by Heads of Subordinate Offices (except those issued by Ministries or Departments under the powers of a Head of Department).
    • Land-related sanctions (e.g., grants of land or alienation of land revenue) must be communicated to the Audit and/or Accounts Officer in a monthly consolidated return.

Vector Illustration Important Information Sign Stock Vector | Adobe Stock    Lapse of Sanctions

A sanction for any new charge shall lapse unless specifically renewed, if no payment has been made, in whole or in part, within 12 months from the date of issue of such sanction. However, the following exceptions apply:

  1. When a specific period of currency for the sanction is prescribed in departmental regulations or is mentioned in the sanction itself, it will lapse at the expiry of that period.

  2. If a sanction specifies that the expenditure will be met from the budget provision of a particular financial year, the sanction will lapse at the end of that financial year.

  3. In the case of purchase of stores, the sanction will not lapse if:

    • Tenders have been accepted (for local or direct purchases), or
    • An indent has been placed (for Central Purchases) on the Central Purchase Organization within one year from the date of the sanction, even if no payment has been made during that period.

Additionally, sanctions related to permanent establishment additions under a general scheme or allowances for a post/class of government servants that have not been drawn will not lapse.

Remission of Disallowances and Writing Off Overpayments:

  • Remission of disallowances and the writing off of overpayments made to government servants will follow the provisions set out in the Delegation of Financial Powers Rules and any instructions issued thereunder.

Defalcation and Losses

  1. Report of Losses: Any loss or shortage of public moneys, departmental revenue, receipts, stamps, opium, stores, or other property held by or on behalf of the government, irrespective of the cause or manner of detection, must be immediately reported by the concerned subordinate authority to the next higher authority, the Statutory Audit Officer, and the concerned Principal Accounts Officer. This applies even if the loss has been made good by the responsible party. However, the following losses need not be reported:

    • Losses due to mistakes in assessments discovered too late for a supplementary claim.
    • Under-assessments caused by interpretation errors later overruled by a higher authority after the prescribed time limit.
    • Refunds allowed for time-barred claims.
    • Petty losses of value not exceeding ₹10,000.

  2. Serious Irregularities:

    • Cases involving serious irregularities must be reported to the Financial Adviser or Chief Accounting Authority of the concerned Ministry or Department and the Controller General of Accounts, Ministry of Finance.

  3. Report of Loss – Two Stages:

    • Initial Report: A report should be made as soon as there is suspicion of a loss.
    • Final Report: A detailed report should be sent after investigation, outlining the nature and extent of the loss, errors or neglect leading to the loss, and the prospects of recovery.

  4. Disposal of Reports:

    • The final report should reach the Head of the Department through proper channels. The Head of Department will dispose of the report within their delegated powers. Reports that cannot be disposed of at this level should be submitted to the Finance Ministry.

  5. Misappropriation and Recovery:

    • In cases of misappropriation, defalcation, or embezzlement, the amount may be redrawn on a simple receipt pending investigation or recovery, with the approval of the competent authority.

  6. Losses Due to Government Servants’ Culpability:

    • If government servants are found responsible for a loss, the loss will be borne by the Central or State Government department concerned with the transaction. Recoveries made from the government servants will be credited to the respective government department.

  7. Losses from Erroneous Cheques or Irregular Accounting:

    • Losses arising from erroneous or irregular issue of cheques or accounting of receipts must be reported to the Controller General of Accounts, along with circumstances leading to the loss, to address defects in rules or procedures.
 

Loss of Government Property due to Fire, Theft, Fraud

  1. Material Loss or Destruction due to Fire, Theft, Fraud, etc.:

    • In cases of loss or destruction of government property due to fire, theft, fraud, or similar causes, departmental officers must follow the provisions outlined in Rule 33 and adhere to the additional instructions provided below.

  2. Reporting Losses Above ₹50,000:

    • Losses above ₹50,000 due to fire, theft, fraud, etc., must be reported to the Police for investigation immediately. All concerned personnel must assist the police in their investigation.
    • A formal investigation report should be obtained from the police authorities in all cases referred to them.

  Loss of Immovable Property (Fire, Flood, etc.)

  1. Reporting Loss of Immovable Property:

    • Losses exceeding ₹50,000 to immovable property (such as buildings, communications, or other works) caused by fire, flood, cyclone, earthquake, or other natural causes must be reported to the Government immediately through the usual channels.
    • All other losses should be reported to the next higher authority immediately.

  2. Report to Audit and Accounts Officers:

    • After conducting a full inquiry to assess the cause and extent of the loss, a detailed report should be submitted to the Government through the proper channel.
    • Simultaneously, a copy or abstract of the report should be forwarded to the Audit Officer and Pay and Accounts Officer.

Responsibility for Losses

  1. Personal Responsibility of Officers:

    • An officer will be personally responsible for any loss sustained by the government due to fraud or negligence on their part.
    • An officer will also be held responsible for losses arising from fraud or negligence by another officer, if it is shown that the officer contributed to the loss through their own action or negligence.

  2. Departmental Proceedings for Loss Assessment:

    • Departmental proceedings to assess responsibility for the loss will be conducted according to the instructions in Appendix 1 and those issued by the Ministry of Personnel.

Prompt Disposal of Loss Cases

  • Action for Loss Cases: The actions related to the detection, reporting, write-off, and final disposal of loss cases should be completed promptly. Special attention must be given to taking action against delinquents and implementing remedial measures to strengthen the control system.

Submission of Records and Information

  1. Demand for Information by Audit or Accounts Officer:

    • A subordinate authority must provide all reasonable facilities to the Audit Officer and Pay and Accounts Officer for the discharge of their functions. This includes furnishing the fullest possible information required for preparing official accounts, reports, payments, and conducting internal audits.
    • The subordinate authority must not withhold any information, books, or documents requested by the Audit Officer or Accounts Officer.

  2. Handling Classified Documents:

    • If the contents of any file are classified as ‘Secret’ or ‘Top Secret’, the file should be sent personally to the Head of the Audit Office. This fact should be clearly specified.
    • The Head of the Audit Office will then handle the file in accordance with the standing instructions for the handling and custody of such classified documents.

Ch.-3 - BUDGET FORMULATION AND IMPLEMENTATION

  Financial Year: The government’s financial year begins on April 1st and ends on March 31st of the following year.

  Presentation of Budget to Parliament:

    • The Finance Minister presents the Annual Financial Statement (Budget) to Parliament before the start of the financial year, as per Article 112(1) of the Constitution.
    • The budget includes estimates of the Central Government’s receipts and expenditure for the financial year.
    • The Railway Budget is now part of the General Budget, effective from 2017-18, with Demands for Grants and Budget Estimates for Railways included in the General Budget.
    • Articles 112 to 116 of the Constitution govern the preparation, formulation, and submission of the budget to Parliament.

 Budget Guidelines:

    • The Ministry of Finance (Budget Division) issues guidelines for preparing budget estimates, which all Ministries and Departments must follow.
    • The budget must contain:
      • Estimates of expected revenue for the financial year.
      • Estimates of expenditure for each program, scheme, and project.
      • Estimates of interest, debt servicing, and loan repayments.
      • Any other prescribed information.

Receipt Estimates:

    • Receipt estimates are prepared separately for each Major Head of Account in the prescribed format by estimating authorities.
    • Each Major Head should include detailed estimates, including actuals from the past three years, and a breakdown of tax and non-tax revenues.
    • Significant variations in estimates compared to past actuals or budget estimates must be explained.
    • The Ministry of Finance, in consultation with administrative Ministries, prescribes accounting heads for tax and non-tax revenues.

  Non-Tax Revenues:

    • Non-tax revenues, collected through Ministries, Departments, autonomous bodies, and implementing agencies, are a significant source of government revenue.
    • While tax revenues and borrowings are managed by the Ministry of Finance, non-tax revenues are handled by various departments.

  User Charges:

  • Ministries/Departments must identify and publish user charges on their websites.
  • User charges should recover the cost of providing services with a reasonable return on capital investment. Any deviation from this must be justified.
  • User charges should be reviewed every three years and linked to price indices. They should be set via rules or executive orders, not statutes, wherever possible.

  Dividends and Profits:

  • Dividends and profits including the transfer of surplus from Reserve Bank of India is a major component of the non-tax revenues.
  • Dividends from Central Public Sector Enterprises must be paid promptly after the AGM decision.
  • Ministries/Departments must monitor the timely payment of dividends and profits, in line with guidelines from DIPAM.

  Receipts Portal:

  • A public portal is provided for online collection of non-tax revenues (including user charges). Earlier named as Non-tax receipt portal, Now termed as ‘Bharatkosh‘ portal.

  Expenditure Estimates:

  • Expenditure estimates must show amounts for both charged expenditure under Article  112(3) of the Constitution and voted expenditure under Article 113(2) of the Constitution.
  • Estimates should distinguish between revenue and capital accounts, including on loans by the Government and for repayment of loans, treasury bills, cash management bills and ways and means advances.
  • The Revised and Budget Estimates of both Revenue and Capital expenditure after being scrutinized by the Financial Advisers and approved by the Secretary of the Administrative Ministry or Department concerned shall be forwarded to the Budget Division in the Ministry of Finance.

  Demands for Grants:

  • Estimates for expenditure requiring the Lok Sabha’s vote are presented in the form of Demands for Grants. Generally, one Demand for Grant is presented in respect of each Ministry or Department. However, Large ministries may have more than one Demand.
  • The Demand for Grants is presented in two stages: by the Budget Division, Ministry of Finance (main Demand) along with the Annual Financial Statement and by Ministries (detailed Demand for Grants (DDG) for consideration by the Departmentally Related Standing Committee).
  • The Finance Ministry prescribes the format and heads under which expenditure is classified in the Demands for Grants.

  Estimates Scrutiny:

  • Each Ministry’s estimates are scrutinized in the Budget Division, Ministry of Finance, with changes made based on discussions in pre-budget meetings.
  • The final estimates are incorporated into the budget documents.

  Outcome Budget:

  • After finalization of the estimates for budgetary allocations, the Department of Expenditure in consultation with NITI Aayog and the concerned Ministries shall prepare an Outcome Budget statement linking outlays against each scheme/project with the outputs/deliverables and medium term outcomes.
  • Performance against outcomes determines the continuation and funding of schemes/projects.

  Vote on Account:

  • If the Appropriation Bill is not passed before the start of the financial year, a ‘Vote on Account’ is obtained to cover initial expenditures, excluding new services.

  Communication and Distribution of Grants:

  • After the Appropriation Bill is passed, the Ministry of Finance communicates the approved budget to Ministries/Departments, who then distribute it to their subordinates. Pay and Accounts Officers check the allocations.

Control of Expenditure Against Budget: 

 Responsibility for Control of Expenditure

  • Departments of the Central Government are responsible for controlling expenditure against sanctioned grants and appropriations.

  • Control is exercised through Heads of Departments, Controlling Officers, and Disbursing Officers.

 Utilization of Grants and Appropriations

  • Grants/Appropriations cover charges (including past liabilities) payable within the financial year.

  • No charges can be authorized after the financial year’s expiry.

  Limitation on Expenditure

  • No expenditure can exceed the total grant/appropriation authorized by Parliament unless:

    • Supplementary grant/appropriation or advance from the Contingency Fund is obtained.

  • Voted and Charged portions and Revenue and Capital sections are distinct, with no re-appropriation between them.

 Procedure for Effective Control of Expenditure

         Responsibilities of Drawing and Disbursing Officers (DDOs):

  • Preparation of Bills:

    • Separate bills for charged and voted expenditure.

    • Complete account classifications on each bill, with accurate distribution across object heads.

    • Enter progressive expenditure totals for the relevant appropriation unit.

  • Registers in Form GFR 5:

    • Maintain separate registers for allocation under each minor/sub-head, either physically or electronically.

    • Send a monthly copy of entries (or a ‘nil’ statement if no entries) to the Controlling Officer.

       Responsibilities of Controlling Officers:

  • Monitoring of Returns:

    • Maintain a broadsheet in Form GFR 6 to track returns from Disbursing Officers.

    • Verify returns for correct classification, expenditure within appropriation, and proper balances.

    • Rectify any detected defects.

  • Compilation of Statements:

    • Prepare monthly statements in Form GFR 7, incorporating:

      • Figures from DDOs.

      • Data from personal registers (Form GFR 5).

      • Adjustments from the Accounts Officer for inward claims or transfer entries.

    • Communicate adjustments affecting subordinate DDOs.

          Responsibilities of Heads of Departments:

  • Consolidate accounts in Form GFR 8, detailing complete expenditure from grants/appropriations up to the preceding month.

Key Forms

  • GFR 5: Register for allocation under sub-heads.

  • GFR 6: Broadsheet for monitoring returns.

  • GFR 7: Monthly statement by Controlling Officers.

  • GFR 8: Consolidated account by Heads of Departments.

Monthly Reconciliation of Accounts

  • The Head of Department (HoD) and the Accounts Officer (PAO) share joint responsibility for reconciling departmental accounts with PAO records monthly.

Procedure:

  1. Maintenance of Bill Register (Form TR 28-A):

    • DDOs record all bills presented for payment and note cheques received or e-payment status.

    • Any retrenchments made by PAO are documented in the remarks column.

  2. Monthly Statements by PAOs:

    • PAOs provide DDOs with monthly extracts from the expenditure control register or Compilation Sheet, showing grant expenditure categorized by major and minor heads.

    • May to March statements include progressive figures.

  3. Verification by DDOs:

    • DDOs compare PAO figures with their GFR 5 register, excluding book adjustments.

    • Discrepancies are resolved with the PAO.

    • Adjustments advised by PAOs are noted, and DDOs provide a certificate of agreement to the PAO by the last day of the subsequent month.

  4. Statements to Heads of Departments:

    • PAOs send monthly expenditure statements to the HoDs, compared with GFR 8 consolidated accounts.

    • HoDs reconcile differences with the PAO and certify quarterly figures by the 15th of the second month following the quarter’s end.

6. Departmental Monitoring of Expenditure

  • Departments collect monthly expenditure figures from HoDs in Form GFR 8 by the 15th of the following month.

  • Separate records are maintained for Revenue and Capital expenditures.

  • Corrections to departmental figures are made using plus or minus entries in progressive totals.

  • Final appropriation accounts are based on figures booked by the Accounts Office.

7. Monitoring Physical Progress of Schemes

  • Departments obtain monthly statements from HoDs detailing:

    • Scheme name and Budget provision.

    • Progressive expenditure and physical progress.

    • Reasons for deviations from financial or physical targets.

8. Maintenance of Returns and Broadsheet

  • A Broadsheet (Form GFR 9) is maintained to monitor the receipt of monthly returns and ensure timely rectification of any defaults.

9. Liability Register for Expenditure Control

  • Controlling Officers obtain monthly Liability Statements (Form GFR 3-A) from October onward.

  • A Liability Register (Form GFR 3) is maintained to monitor liabilities and ensure control over expenditure.

Rule 59: Monitoring Savings or Excesses

  • The Head of Department (HoD) or Controlling Officer must estimate monthly savings or excesses and take action to regularize them as per Rule 62.

Rule 60: Responsibility for Expenditure Control

  • The Accounts Officer reports disproportionate expenditure to the HoD, especially recurring expenditures.

  • The ultimate responsibility for controlling expenditure rests with the authority administering the grant/appropriation, not the Accounts Officer.

Rule 61: Excess Expenditure

  1. Approval Required:

    • Accounts Officers cannot permit payments exceeding Budget provisions without Chief Accounting Authority’s approval.

  2. Ensuring Funds:

    • Financial Advisers and Chief Accounting Authority must ensure funds are available via Re-appropriation or Supplementary Grants before approving excess expenditure.

Rule 62: Management of Savings

  1. Surrender of Savings:

    • Anticipated savings must be surrendered to the Finance Ministry before the financial year ends, and unutilized funds lapse at the close of the year.

  2. Immediate Surrender:

    • Savings or unutilizable provisions must be surrendered as soon as identified, without holding them in reserve.

  3. Avoiding Expenditure Rush:

    • Expenditure rush, especially at the year-end, is a breach of financial propriety.

    • Adherence to the Monthly Expenditure Plan (MEP) and Quarterly Expenditure Plan (QEP) is mandatory.

  4. Financial Advisers’ Role:

    • Ensure strict adherence to expenditure plans and Ministry of Finance guidelines.

Rule 63: Expenditure on New Services

  • Expenditure on “New Services” not included in the Annual Budget is prohibited unless approved via:

    • Supplementary Grants,

    • Appropriations, or

    • Advances from the Contingency Fund.

Rule 64: Additional Allotments for Excess Expenditure

  1. Responsibility for Expenditure Control:

    • Subordinate authorities must ensure their expenditures do not exceed the allotment.

    • Excess expenditure requires additional allotments obtained in advance.

    • Authorities must maintain a Liability Register (Form GFR 3).

  2. Disbursing Officer’s Authority:

    • Disbursing Officers cannot authorize payments exceeding available funds.

    • For claims causing excess expenditure, orders from the administrative authority must be obtained before payment.

    • Administrative authorities must arrange funds through Re-appropriation, Supplementary Grants, or Contingency Fund advances.

Rule 65: Compliance with Financial Instructions

  • Ensure compliance with guidelines in the Note under Appendix 10 for managing expenditure and handling excess claims.

Supplementary Grants

  • When savings within a grant are unavailable, or the expenditure involves a “New Service” or “New Instrument of Service”, a Supplementary Grant or Appropriation must be obtained as per Article 115(1) of the Constitution before payment (refer to Appendix 5).

Advance from Contingency Fund

  1. Purpose of Advance:

    • To cover unforeseen expenditures exceeding sanctioned grants or for new services not included in the budget.

    • Used when there is insufficient time for the Supplementary Demand for Grants before the financial year ends.

  2. Additional Uses:

    • Covers expenditures exceeding provisions under an Appropriation (Vote on Account) Act.

  3. Application Details:

    • Must specify the additional expenditure and indicate the grant subhead and primary unit to which it relates. For clarifications, refer to the Finance Ministry.

  4. Procedure:

    • Governed by the Contingency Fund of India (Amendment) Rules, 2021, detailed in Appendix 6.

Inevitable Payments

  • Provisions under Article 114(3):

    • Government must not delay payments that are indisputably payable.

    • Anticipated liabilities must be included in the Demands for Grants presented to Parliament.

Chief Accounting Authority: Duties and Responsibilities

The Secretary of a Ministry/Department, as the Chief Accounting Authority (CAA), has the following responsibilities:

  1. Financial Management:

    • Accountable for the Ministry/Department’s financial activities.

    • Ensure public funds are used for their intended purposes.

  2. Efficiency and Compliance:

    • Promote efficient, economical, and transparent use of resources to achieve project objectives.

    • Adhere to performance standards.

  3. Parliamentary Accountability:

    • Represent the Ministry/Department before the Public Accounts Committee and other Parliamentary Committees.

  4. Performance Monitoring:

    • Regularly assess program and project performance to ensure objectives are met.

  5. Financial Reporting:

    • Prepare expenditure and other statements as per Ministry of Finance regulations.

  6. Records and Internal Controls:

    • Maintain accurate financial records and implement robust internal controls.

  7. Procurement Compliance:

    • Follow Government procurement rules for works, services, and supplies, ensuring fairness, transparency, and cost-efficiency.

  8. Revenue Collection and Expenditure Control:

    • Ensure all Government dues are collected and prevent unauthorized or irregular expenditures.

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